MTNL raises Rs 500 cr from banks to repay debts

August 23, 2011 16:52 IST

State-owned telecom major MTNL on Tuesday said it has raised Rs 500 crore (Rs 5 billion) from various banks that will be used to repay debts and meet operational expenses.

"Out of the total loan amount of Rs 1,500 crore (Rs 15 billion), we have raised Rs 500 crore (Rs 5 billion) from various banks and for the rest of the amount, we are still in talks with the them (banks)," MTNL Chairman and Managing Director Kuldip Singh said on the sidelines of an event.

In July, MTNL had invited expression of interest (EoI) from banks for providing long-term loans of Rs 1,500 crore (Rs 15 billion) with a floating interest rate for a tenure of seven years. It wanted to raise the funds to repay its debts and meet operational expenses.

The loan might be used to repay the loan MTNL had taken for buying 3G and BWA spectrum last year.

The company is already in the process to restructure its Rs 7,000 crore (Rs 70 billion) loan taken for buying 3G and BWA spectrum last year. The PSU plans to convert Rs 3,000 crore (Rs 30 billion) loan into a long-term debt.

Delhi and Mumbai were the most expensive circles for 3G, with the bid for Delhi costing Rs 3,316.93 crore (Rs 33.16 billion) and Mumbai Rs 3,247.07 crore (Rs 32.47 billion), against the reserve price of Rs 320 crore (Rs 3.2 billion) each for both the metros.